The Kenya government has seized 56 accounts belonging to fintechs including Nigeria’s Flutterwave over money laundering.
Brand Spur Nigeria learnt that authorities in Kenya said Flutterwave’s transactions were suspicious resulting in non-compliance with the country’s financial regulations, The Star in Nairobi reported.
Amongst the seven businesses caught in the probe, Flutterwave appeared the largest and it alone had its accounts frozen to the tune of $56.7 million (6.7 billion Kenyan shillings) by the country’s Asset Recovery Agency, The Star said.
According to Kenya’s The Star GTBank and Ecobank, amongst other financial services in Kenya, also provided their platforms to Flutterwave in the illicit transaction.
Other affected fintechs are Boxtrip Travel and Tours Limited, Bagtrip Travel Limited, Elivalat Fintech Limited, Adguru Technology Limited, Hupesi Solutions, Cruz Ride Auto Limited and one Simon Ngige.
Investigations into Flutterwave began several months ago, and authorities obtained warrants to seize the firm’s accounts in April. The provisional seizure permit was granted for 90 days, and the matter will be heard on November 7.
The seizure order appears to coincide with a report published by journalist David Hundeyin, which exposed alleged financial, criminal, and ethical lapses against Flutterwave and Gbenga Agboola, Chief Executive in April 2022.
Agboola denied the allegations as reported by Hundeyin over at Subtack, but said he would make necessary changes to his management of the firm going forward.
In the indictment reported by The Star on Wednesday, Agboola was said to have conducted suspicious transactions to the tune of $101 million dollars (12 billion Kenyan shillings) before authorities caught wind of his activities.
The Kenyan daily also said Agboola and his partners in Nairobi hid under the shadows to exploit the country’s financial system, including conducting about 185 online card payments using the same identification number.
Several other suspicious transactions were also flagged by anti-money laundering detectives, including another instance in which Mr Agboola allegedly connived with another Nigerian national to launder cash through the Kenyan banking system.
“If indeed the Flutterwave was providing merchant services, there was no evidence of retail transactions from customers paying for goods and services. Further, there is no evidence of settlements to the alleged merchants,” Kenyan prosecutors added.
Flutterwave Dismisses Allegations
Meanwhile, Flutterwave has quickly dismissed the allegation, saying the court was wrong in freezing its account.
Reacting to the development in a statement on Thursday, Flutterwave described the allegations as “entirely false”.
Flutterwave said: “Through our financial institution partners, we collect and pay on behalf of merchants and corporate entities. In the process, we earn our fees through a transaction charge, records of which are available and can be verified. As a business, we hold corporate funds to support our operations and provide services to all our customers.
“By facilitating payments for the biggest organizations in the world and everyday businesses, we process significantly large volumes of money and contribute to growing the economy in Kenya, and the rest of Africa.
“We are a financial technology company that maintains the highest regulatory standards in our operations.
“Our Anti-money laundering (AML) practices and operations are regularly audited by one of the big 4 firms. We remain proactive in our engagements with regulatory bodies to continue to stay compliant.
“Flutterwave has a responsibility to ensure the integrity of the ecosystem, and we pledge our commitment to continue to work with all stakeholders to uphold this.
“We are working to figure out the motive behind the publication and have the records straightened, the statement added.”